A report into foreign bribery in Latvia has “cast doubts” over the country’s ability to enforce anti-corruption laws.
The report, by the OECD’s Working Group on Bribery, said “recent personnel issues” in Latvia’s anti-corruption agency KNAB and “negative government commentary” about KNAB had affected its ability to function.
The OECD said there were five known allegations of foreign bribery associated with Latvia, which joined the OECD’s anti-bribery convention in May 2014, but “none have led to formal investigations”.
Two allegations involved non-Latvian companies and non-Latvian public officials, in which bribes passed through Latvian banks. Another involved a Latvian entrepreneur allegedly bribing foreign public officials to obtain contracts, while details of two other allegations were “unavailable as cases are under preliminary investigation”.
The report said “lax enforcement and weak regulation heighten the risk that proceeds of foreign bribery are laundered through Latvian banks”.
The OECD recommends Latvia ensures “KNAB is fully functional and not subject to improper government criticism”, “proactively” investigate foreign bribery, improve legislation and strengthen anti-laundering measures.
“The lead examiners congratulate Latvia for taking significant legislative steps to implement the convention both before and after becoming a party to the convention,” said the report.
“Nonetheless, there remain concerns about Latvia’s practical implementation of the convention, including the operation of its anti-corruption law enforcement agency.
“Recent personnel issues have overshadowed the agency’s investigative efforts and called into question its investigative capacity. Governmental action risks creating a perception of political interference in the agency’s work.
“Latvia should be more proactive in investigating foreign bribery allegations. Sanctions for corruption are inadequate. Further legislative amendments are also needed, including to the foreign bribery offence.”
Latvia will report to the OECD in a year’s time on progress in implementing key recommendations.